|
||||||||
| |||||||||
|
The following is the text [edited] submitted by a reader, Patrick D. Shannon on the issue of Long-Term Care. His email to us inspired the creation of the page devoted to Long-Term Care under the Retirement Planner. Long-Term Care Insurance (LTCi) 17 June 2002 Of people who have reached age-65, about 25% will eventually spend one year or longer in a nursing home. Assisted-living care is less involved than nursing-home care. Nursing home users stay an average of 2.5 years. Long-Term Care (LTC) insurance policies cover both nursing home care and home care beyond health insurance coverage. Most often, wives live longer than their husbands, and are more likely to need LTCi than men. Of men age-65, 66% will never use a nursing home.
The most affordable LTC insurance policies limit coverage to a cumulative max of 5 years. Anyone with several hundred thousand dollars that can be dedicated solely to such care does not need to buy insurance. Poor people are eligible for free Medicaid coverage. In 2001, 50% of nursing home users were on Medicaid. Care paid by Medicaid is not necessarily bad, at least at present. The federal government is beginning to reduce Medicaid over the long term in order to increase personal responsibility. I heard that from an insurance salesman, but it makes sense to not rely on Medicaid. LTCi has a high price, but its absence means you have little choice if you need a nursing home or less involved help. Insurance costs are increased by: (1) Maximizing coverage, (2) Increased age when the policy is bought, and (3) Bad health status when the policy is purchased. If you cannot pass the physical, you have waited too long to buy LTCi. Even some young people are not eligible. For a premium of $2500 per year at my [increased] age of 63, I can buy lifetime [ultramax] coverage of $130 [average] benefit per day if and only if I can pass a rigorous physical. Those who cannot pass a rigorous physical might still be eligible for group insurance which has looser physical standards. The result of loose physical standards is higher premiums for many in the group. For a premium of $1000, a 45-year-old can buy coverage for 5 years (cumulatively) in group insurance. You must read up on LTCi if you are a responsible person. Its options make it the most complex of insurance policies, and there are traps. Take advice from your financial counselor before buying a policy. LTCi should be seen as part of your financial plan and especially of your retirement plan. A basic intro booklet, "A Shopper's Guide to Long-Term Care Insurance," 45 pages, $0.50. is available on the National Association of Insurance Commissioners (NAIC) website: www.naic.org/1pubcat/consumer.htm. NAIC represents state government regulators. State Health Insurance Assistance Program (SHIP) is a free counseling program in every state for older adults on health insurance related topics such as LTCi, Medicare, HMOs, etc. They can look at your whole insurance situation and help you decide if you need other insurance, help you with Medicare claims, help you read and understand an insurance policy you are considering buying, give you a list of Medigap policies approved for sale in your state, and provide other important services. For the program nearest you, call the Eldercare Locator, 1800-677-1116, www.eldercare.gov. United Seniors Health Council is a public service organization that specializes in consumer health and health insurance issues. The council publishes a newsletter and sells books on long-term care and insurance. 1800-637-2604. www.unitedseniorshealth.org/html/pubs.html. Its $15 book on LTC is available in many bookstores: Planning for Long-Term Care, 2002, McGraw Hill Publishing, 145 pages. Other books: (1) B. Lipson. J.K. Lasser's Choosing the Right Long-term Care Insurance, 2002, John Wiley Publishing. Library shelf number: 368.382 LIP (Ref). (2) P. Shelton. Long-term Care: Your Financial Planning Guide, 2001, Kensington Publishing. Library shelf number: 368.38 SHE (Ref). (3) T. Lieberman. Consumer Reports Complete Guide to Health Services for Seniors; What Your Family Needs to Know About Finding and Financing Medicare, Assisted Living, Nursing Homes, Home Care, Adult Day Care, 2000, Three Rivers Press. Library shelf number: 362.16 C (Ref). Other info sources: (1) www.seniors.gov/retirement.html. The federal web portal. (2) www.hiaa.org/cons/ltcdirec.html. Health Insurance Association of America. HIAA is a national association of insurance companies. (3) Several other online sources grade nursing homes and locate assisted-living help. One general source is at www.ahrq.gov/consumer/qntascii/qntltc.htm, "Choosing Long-Term Care. Your Guide to Choosing Quality Health Care." AHCPR Publication No. 99-0012. US Agency for Healthcare Research and Quality, 2001.
|
